Fanconi anemia (FA) is a genetic syndrome manifested by bone marrow failure, physical anomalies, and cancer susceptibility. Marked by genotypic and phenotypic heterogeneity, FA consists of at least five complementation groups: A, B, C, D, E. The defective gene responsible for the C group, FAC, was identified by complementation cloning. The hallmark of the FA cell phenotype is hypersensitivity to cross-linking agents such as mitomycin C (MMC), suggesting an inability to tolerate specific DNA damage. We have used two approaches to deduce the molecular function of the FAC polypeptide. First, we have overexpressed FAC in transgenic mice and in Sf9 and yeast cells. Second, we have used recombinant viral vectors to transduce normal copies of the FAC cDNA to cells bearing FAC mutations. Phenotypic correction was demonstrated following viral transduction by resistance to MMC-induced cell death and insusceptibility to induced chromosomal aberrations. In conjunction with cell cycle analyses, our findings suggest that FAC is responsible for diminishing DNA damage prior to the G2 phase of the cell cycle. We next demonstrated that CD34-enriched hematopoietic progenitors isolated from FA patients exhibit the same hypersensitivity to MMC characteristic of cultured FA cells. Gene transduction of FAC progenitor cells using a viral vector containing the FAC cDNA significantly improved colony formation in clonogenic assays in the absence, as well as in the presence, of low dose MMC. Improved colony growth may reflect the genetic rescue of progenitor cells following transduction with the normal FAC cDNA. The two types of vectors we have used to transduce FAC are the Moloney retrovirus and the human adeno-associated virus (AAV). We demonstrated that an AAV vector carrying the FAC cDNA can mark human cord blood hematopoietic cells engrafted in SCID mice. In addition, we documented retroviral-mediated transfer of the normal human FAC cDNA to reconstituting stem cells of mice. Based on these preclinical studies, we have proposed a clinical trial of gene therapy for FAC patients, scheduled to begin this spring. FA stem cells rescued by gene transduction should have a selective growth advantage within the hypoplastic FA marrow environment in vivo, suggesting a novel therapeutic approach to marrow reconstitution.